Panmure, whose analysts visited Kenmare's Moma titanium mine in Mozambique last month, said the company had indicated that discussion with lenders to
restructure outstanding loans was underway.

"We expect loan changes to be announced shortly, in particular an adjustment to the capital repayment schedule of subordinated loans. This should ensure the balance sheet remains robust beyond 2014," the broker said.

Panmure also said major mine works last year had increased Moma's production and processing capacity by half and electricity authorities were upgrading the power network in the area, which should reduce disruption.

"We believe Kenmare has been oversold and we move from 'hold' to 'buy' at our target price of 32p," the broker said.

Shares in Kenmare, which has been talked about as a potential takeover target, rose 4.2% to 16.05p at 14:24 in London.

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